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Matthias Brinkmann, the European Union’s ambassador to Canada, says it’s “crunch time” for the Canada-EU Comprehensive Economic and Trade (CETA) negotiations and identified patent protection for pharmaceuticals as one of several thorny issues still on the table. It is time for the Harper government to determine its position.

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The EU and the U.S. have agreed not to reconcile their differences on intellectual property rights in their upcoming free-trade talks. Ottawa should insist on the same approach, as the Canadian regime offers more protection in important areas than that of the EU – and the U.S.

Much of the world’s production of pharmaceuticals comes from companies based in the U.S. and Japan. Article 4 of the WTO TRIPS (Trade Related Intellectual Property) Agreement requires that any patent concessions granted to the EU shall be accorded immediately and unconditionally to the nationals of all other Members [i.e. member governments]. Canada should not give a free ride to companies in the United States and Japan. That is exactly what would happen if Canada agreed to the EU proposals.

Before putting all its cards on the table the Canadian government should determine if EU negotiators are in danger of being repudiated by their own Parliament. The EU Parliament may decide not to ratify the CETA if it contains pharmaceutical patent provisions which exceed the following markers that both the Parliament and the EU Commission have set down. After all, the Parliament rejected the anti-counterfeiting trade agreement (ACTA) in July. Two markers stand out.

First, in its resolution of June 8, 2011, on EU-Canada trade relations the Parliament specifically addressed generic drugs stating that it: “ Considers that the chapter on intellectual property should not negatively affect the production of generic medicines and must respect the TRIPs exceptions for public health .”

Second, the European Commission in its December 16, 2011 “Pharmaceuticals Sector Fiche” – a sort of authoritative negotiating brief – set out the position that “the EU should also seek to find the correct balance in bilateral and multilateral trade agreements, in order that it does not impose TRIPS+ requirements on countries where this may have an adverse effect on either public health or the ability of the EU to import its own generic medicines.”

It is not clear whether the EU has considered how CETA would constrain the EU’s ability to change its own patent regime – and that of its member states – in response to rising health care costs.

On the other hand, the interest of the brand-name industry in Canada is very clear. The industry and its supporters have been arguing strongly that Canada should yield, contending that increased patent protection will encourage more investment in research and development in Canada, a proposition refuted by successive annual reports of the Patented Medicine Prices Review Board and the realities of global drug development. The brand-name companies and their foreign parents would be the double beneficiaries, reaping both increased revenues from the extension of their product monopolies, and at the same time watching the erosion of the position of their generic competition and their associated infrastructure investments in Canada.

It’s crucial that Ottawa continues its work to determine the real cost of the European Commission’s request for Canada to extend the life of pharmaceutical patents. One detailed study – commissioned by the generic industry – estimated the potential cost at $2.8-billion a year. The brand industry rejected the report without offering any analysis.

Canada must be prepared to tell the European Commission that its demands go too far. Controlling the increasing cost of health care is a top concern of governments around the world. Every country has a bottom line in trade negotiations. This is a logical one for Canada to draw.

John Weekes, a senior business adviser at Bennett Jones LLP, was Canada’s ambassador to the WTO and chief negotiator for the NAFTA. He provides advice to the Canadian Generic Pharmaceutical Association (CGPA).

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